Agricultural Market Viewpoint with Wandile Sihlobo

Similar to the improvement in maize production witnessed in South Africa, Zambia, Zimbabwe, and other countries in the Southern African region, Kenya's maize crop has also shown signs of recovery. The latest estimate by the United States Department of Agriculture (USDA) places the country's harvest at 4.4 million tonnes. This is up 15% from the previous season due to both the expansion in area plantings and improved yields. Consequently, imports are expected to decline by 17% to 250,000 tonnes in the 2025-26 marketing year. The typical maize suppliers to Kenya in times of need include Tanzania and Uganda. It is likely that when domestic supplies have lessened, Kenya will still rely on these countries to supplement its domestic supplies. South African maize exporters are unlikely to participate in the Kenyan market due to the country's reduced annual maize needs and its long-standing ban on imports of genetically modified crops. Over 80% of South Africa's maize is genetically modified, which is typically used as a non-tariff barrier by various African countries. Still, South Africa's maize exports are likely to focus on the neighbouring SACU countries, including Zimbabwe, and the Far East markets in the coming months. The East African region is unlikely to be a primary focus for many domestic maize exporters. Listen to the podcast for more information. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

We see a constructive picture of South Africa's food price inflation, easing at 5.2% in August 2025, from 5.5% in the previous months. South Africa has an abundant harvest of grains, fruits, and various vegetables, and the benefits of this are starting to show in prices. It is these products that were the major drivers of the moderation in price inflation. A key product that many are watching is meat, particularly beef (and red meat products), which has remained elevated, although slaughtering has resumed in major feedlots across the country. The issue is that South Africa is experiencing a foot and mouth disease outbreak. Initially, the panic buying, not necessarily a shortage of product, was the main driver of meat prices. This is when the country's largest feedlot announced the cases in its facility. This led to concerns about red meat supplies and some panic buying, thus pushing up prices. The slaughtering has now resumed in the major feedlots, although foot and mouth remains a profound challenge in the country. Listen to the podcast for more information. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

Next month, October, we will start our 2025-26 summer grains and oilseed production season in South Africa. The outlook for the season looks optimistic with prospects of rain, which will benefit not only crops but the overall agricultural sector. Listen to the podcast for more information. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

South Africa's agricultural sector is in its recovery phase, and the second quarter of 2025 figures signal the improvement, albeit mildly. The country's agricultural gross value added expanded by 2.5% quarter-on-quarter (seasonally adjusted) in the second quarter. This follows the 18.6% quarter-on-quarter in the first quarter of the year. The expansion was primarily due to the improved performance of certain field crops and the horticulture subsectors. As the close observers of the sector know, the quarterly data tend to be somewhat volatile, influenced by times of harvest and crop deliveries, amongst other factors. It is particularly such issues that the second-quarter growth figure was much softer compared to the start of the year. We experienced a delay in our summer grain harvest, with more momentum occurring at the start of the third quarter than is typically seen in the second quarter of the year. Indeed, we have ample summer grain and oilseeds, estimated at 19.55 million tonnes (up 26% year-on-year). But the season was late by roughly a month and a half because of the excessively prolonged summer rains, amongst other factors. We have also continued to struggle with the foot and mouth disease and a few avian influenza cases, particularly in the second quarter. It was at the end of the second quarter that the foot and mouth disease vaccines arrived in South Africa for the start of the vaccination campaign. But of course, not all crops were late. The citrus harvest season started in the second quarter, and we have an ample harvest. Farmers moved quickly to take advantage of the tariff pause window in the U.S., which allows for faster harvesting and adds to the general upside in the second quarter performance, although much softer than the start of the year. Listen to the podcast for more information. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

One of the interlinked industries that tends to benefit when the agricultural sector is thriving is the agricultural machinery industry. This year is no different; South Africa's agricultural machinery sales have remained reasonably robust since the start of 2025. I suspect the sales are likely to continue at this encouraging pace. If we consider the details, the tractor sales have increased for the past eight consecutive months, while the combine harvester sales only cooled in the recent few months, having started on solid momentum. The recent data for August also paints a mixed picture. For example, the tractor sales are up 22% y/y, with 700 units sold. Meanwhile, the combine harvester sales were flat, with five units sold. The soft sales in combine harvester sales are not a significant concern given the higher volume of sales in the past few months. The increase in agricultural machinery sales primarily reflects the positive sentiment in the sector regarding the 2024-25 field crop, horticulture, and wine grape harvest, supported by the favourable weather conditions. The sentiment in the sector is also reasonably optimistic, with the Agbiz/IDC Agribusiness Confidence Index at 63 points in the third quarter, which is well above the 50-neutral mark. We expect South Africa's agricultural machinery to remain strong throughout the year. In addition to the better agricultural production conditions, the interest rates have eased somewhat from last year's levels. Also worth noting is that some farmers may continue with machinery replacement in the coming months, which ultimately supports the sales. Ultimately, the machinery industry is benefiting from the positive agricultural conditions in South Africa. Listen to the podcast for more information. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

The Zimbabwean government has reinstated a ban on maize imports. The government believes that in the interim, there are sufficient supplies for the local market and wants to ensure maximum price realisation for the domestic producers before allowing imports. Nevertheless, it remains unclear if Zimbabwe has sufficient maize supplies for the year or will need imports later. Zimbabwe’s 2024-25 maize production is forecast at 1.3 million tonnes, according to recent data from the Pretoria-based unit of the United States Department of Agriculture (USDA). This is just more than twice the output from the previous season, which was a drought period. This recovery in Zimbabwe’s maize production is primarily driven by improved weather conditions and an increase in the area that farmers managed to plant for maize. If this production level materialises, then the ban may be temporary. Zimbabwe’s potential maize harvest of 1.3 million tonnes will not be sufficient to meet the country’s domestic needs of 2.0 million tonnes per annum, leaving it to import the balance. Listen to the podcast for more information. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

After solid export activity in the first quarter of the year, South Africa's agricultural exports totalled US$3.71 billion in Q2, up 10% from the same period a year ago, according to data from Trade Map. This is again a function of both higher volumes of various product exports and better commodity prices. The products that dominated the exports list in the second quarter of the year were mainly citrus, apples and pears, maize, wine, nuts, fruit juices, dates, pineapples, avocados, grapes, and wool, amongst other products. While there remains a need for further improvement in the efficiency of the ports, there has been a material improvement compared to recent years. Agricultural export activity in the second quarter experienced less friction than in the recent past.. My writing on agricultural economic matters is available on my blog: https://wandile.substack.com/ Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

We continue to see more evidence that 2025 will likely be an uneven recovery for South Africa’s agriculture. The horticulture (fruits and vegetables), and field crops (grains, oilseeds and sugarcane) are experiencing excellent yield recovery, benefiting from better summer and winter rains. But the livestock and poultry industries face some constraints. The effects of these divergences are also clear in the jobs data for the sector, with the losses in the livestock industry. The major challenge in the livestock industry is animal disease, mainly the foot and mouth disease in cattle. We also see some risks in the sector broadly emanating from the fractured trade environment, particularly the exports to the US. We discuss all this in this episode of our podcast. Richard Humphries and Sam Mkokeli produce this podcast. *Wandile Sihlobo is chief economist of the Agricultural Business Chamber of South Africa Wandile Sihlobo website

South Africa's maize exports are back in the Far East export markets. These aren't new territories for our maize. We typically export to them during the seasons of abundance, such as this one. Last season, we did not see many maize exports to the Far East. Our export activity focused on Africa. The region was hit by the drought and needed maize more than other regions for staple food. South Africa channelled its maize exports, mainly white maize, to this region. And yes, South Africa was also hit by the drought, but we still had a relatively decent yield, and also benefited from supplies from the past season. This enabled South Africa to export more maize to the African continent. Zimbabwe accounted for 56% of South Africa's maize exports of 2.3 million tonnes last year. We are now back in the season of abundance. Zambia has surplus maize, and Zimbabwe has a better yield, although it may still need about 700,000 tonnes of maize imports later in the season. Zambia, the second largest maize producer in the Southern Africa region, has seen a recovery in its 2024-25 maize production (this season corresponds with the 2025-26 marketing year), now estimated at 3.66 million tonnes, up from 1.50 million tonnes in the previous season, according to Zambia's government data. Zimbabwe's 2024-25 maize production is forecast at 1.30 million tonnes, according to recent data from the Pretoria-based unit of the United States Department of Agriculture (USDA). This is just more than twice the output from the previous season. Still, it is below the 2.00 million tonnes Zimbabwe requires for its domestic annual consumption. Thus, the country may still import later in the year. South Africa and Zambia may be the major maize suppliers to Zimbabwe. In South Africa, our maize production is at 15.03 million tonnes, which is 17% higher than the crop for the 2023-24 season. Importantly, these forecasts are well above South Africa's annual maize needs of approximately 12.00 million tonnes, implying that South Africa will have a surplus and remain a net exporter of maize. Indeed, in the week of July 25, South Africa exported 63,897 tonnes of maize. About 79% was exported to Taiwan, and the rest to the Southern African region. This placed South Africa's 2025-26 maize exports at 428,975 tonnes, out of the expected seasonal exports of 2.0 million tonnes. The current marketing year only ends in April 2026. In the 428,975 tonnes of South Africa's maize exports in the first 13 weeks of the 2025-26 marketing year, nearly half is the Far East markets (25% to Vietnam, 12% to Taiwan, and 11% to South Korea). These are South Africa's traditional maize export markets, mainly yellow maize for animal feed. But we didn't export during the years of drought. It is good to see them back buying South Africa's high-quality maize. We will likely see more robust export activity later in the year once farmers have completed the harvest and there is grain in the silos for export. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. *Wandile Sihlobo is chief economist of the Agricultural Business Chamber of South Africa Wandile Sihlobo website

South Africa's 2024-25 summer grains and oilseed production estimate was lifted again this month, by 2% from the June 2025 estimate to an expected 18.74 million tonnes (up 21% year-on-year). There is an annual uptick in all the crops, mainly supported by favourable summer rains and the decent area plantings. This ample harvest will likely add downward pressure on prices, which bodes well for consumer food price inflation. The recent surge in maize prices was linked to the slow harvest process and quality issues, but that should be short-lived and does not change our view of potentially moderating prices going forward. A closer look at the data reveals that the monthly upward revisions were primarily in maize (+2%) and soybeans (+3%). Meanwhile, the rest of the other crops were roughly unchanged from the previous month. However, the sunflower seed and groundnuts were each lowered by 3% from last month. More specifically, South Africa's maize harvest is now forecast at 15.03 million tonnes, which is 17% higher than the crop for the 2023-24 season. Importantly, these forecasts are well above South Africa's annual maize needs of approximately 12.00 million tonnes, implying that South Africa will have a surplus and remain a net exporter of maize. Regarding oilseeds, the soybean harvest is estimated at 2.72 million tonnes, representing a 47% year-over-year increase. Sunflower seeds are up 12% from the last season and are estimated at 708,300 tonnes. The groundnut harvest is estimated at 61,389 tonnes (up 18% y/y), sorghum production is estimated at 137,970 tonnes (up 41% y/y), and the dry beans harvest is at 74,299 tonnes (up 47%). The base effects and favourable agricultural conditions boosted the yields. In essence, South Africa is experiencing a recovery season for its grains and oilseeds production, although some areas may face quality challenges, particularly white maize. Still, the quality issues do not fundamentally change the available volume for milling acceptability, and food supplies, although it may weigh on farmers' profitability. We see the benefit of the solid harvest in generally softening commodity prices, now lower than last year, boding well for consumer food price inflation. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

Various factors, both positive and negative, continue to shape South Africa's agricultural sector. Starting on a positive note, early signs suggest a high likelihood that the upcoming 2025-26 summer season may also present favourable rainfall conditions across South Africa. Current forecasts indicate a neutral season, which would be generally favourable and with average rainfall. But the occurrence of La Niña rains also remains a possibility, which helps to ease the worries of a swing from a La Niña rainy season in 2024-25 to the opposite, an El Niño. Admittedly, South African farmers will only start looking into these prospects with greater intensity in October, when the 2025-26 summer crop season begins. For now, the focus remains on the harvest activities of summer grains, oilseeds, and citrus, among other crops. We also continue to closely monitor winter crop conditions in the Western Cape province, which has been receiving excellent rainfall. The major crops currently grown during this winter season are wheat, barley, canola, and oats. The Western Cape produces over two-thirds of the crops, and therefore is a focus province for South Africa's winter crops. The crop conditions are generally favourable in the province, although farmers incurred much higher costs than usual in some regions due to the snail challenge for canola. Still, they seem to be managing well at the moment. In other provinces, the winter crop is benefiting from higher dam levels following a prolonged summer rain season in 2025. For the citrus industry, the harvest is proceeding well, and the focus remains on export markets, particularly the U.S. market. August 1 will be the end of the suspension period for the U.S. reciprocal tariffs announced in early April, and it is not clear whether South Africa will continue to benefit from the 10% duties or if they will be readjusted back to the 30% duties we faced at the onset of the Liberation Day tariffs. The South African government, alongside organised agricultural groups and other business groupings, have all been engaged with the matter and is pushing for better market access in the U.S., along with the formulation of a trade offer for a long-term trade agreement. These deliberations may take longer than desired, resulting in additional costs to businesses. The hope is for an extension of the current access while the discussions are underway. Many agricultural industries are at risk if the talks do not yield a favourable outcome. These include the table grapes, nuts, and wine, amongst others. Indeed, the conversation about the potential diversification of export markets has been tabled by some. However, it has limitations in the near term, as businesses cannot switch to new regions overnight. There must be market development work. Moreover, other areas, such as China and India, also continue to present various limitations to South African agricultural products, including higher tariffs and phytosanitary barriers, despite recent pronouncements by China about their willingness to reduce tariffs on products from Africa. This suggests that the South African authorities and businesses will have to continue engaging with the U.S., while also exploring new markets for future diversification. However, this approach cannot be viewed as a replacement for the U.S., but rather as an extension of it. The logistics at the ports have not been as challenging as they were in past years. The ongoing collaboration among Transnet, business, and government is helping to improve planning and operations, enabling better service to the sector. Still, we are far from achieving the desired efficiency, and the improvements will involve increasing investments. Beyond the trade and harvest matters, biosecurity remains a challenge in South Africa. The foot-and-mouth disease continues to present increasing costs to businesses. Listen to the podcast for more insights. Wandile Sihlobo website

Brazil is a major producer of coffee, accounting for nearly 40% of global coffee production. Other major producers are Vietnam 17%, Colombia 8%, Indonesia 6% and Ethiopia 6%, amongst others. Brazil is also a major coffee exporter to the U.S. Consequently, the 50% tariffs that will take effect on August 1 will likely cause Americans headaches. Brazil's coffee is inescapable due to its significance in global coffee production. Coffee prices have been relatively high since the start of the year due to unfavourable weather conditions in Vietnam and Brazil, which have weighed on global supplies. The U.S. tariffs will pose a challenge for American consumers. We are watching the impact of all this on the global coffee prices, which have surged recently on the back of the U.S. tariffs and the preexisting challenges of unfavourable production conditions in South America. As South Africa, we import coffee, and Brazil can surely have room to increase supplies to South Africa. I know our domestic tea and coffee producers won't like me saying this. But hey, we have a decent demand for coffee (just like we do with other "substantive beverages” like whiskies, where we spend over US$300 million on imports annually). Anyways, if one looks at South Africa's coffee imports by volume, we imported, on average, about 23,921 tonnes per annum in the past five years. Brazil and Vietnam accounted for 54% of South Africa's coffee imports. Other suppliers of coffee to South Africa include Uganda (8% of SA's imports), Tanzania (7%), Colombia (4%), Guatemala (4%), Ethiopia (3%), and Honduras (3%). So, if Brazil can offer competitively priced, high-quality products, it can take a market share from the likes of Vietnam and many African suppliers. The South African consumer is not asking for much – just high quality and a better price. In these times of export diversification, while South Africa is a small importer, it certainly can take a few more tonnes of coffee imports from Brazil. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa. Wandile Sihlobo website

The close observers of this letter will recall that when I first argued for South Africa to place temporary restrictions on the imports of poultry products from Brazil, the idea wasn’t for us to be protectionists. Instead, we wanted to ensure that Brazil controls the avian influenza outbreak before we could resume the imports. This decision was not unique to South Africa, but a standard global practice, and at the time, the EU and China had already placed temporary bans on Brazil’s poultry imports. We also had haunting memories of the 2023 avian influenza in South Africa, which led to significant financial losses for poultry producers and higher prices for eggs and other poultry products for consumers. At the same time, we were seeing the perverse spread of the various strains of bird flu in the U.S. and parts of the UK, which had crossed from poultry to dairy, and then to humans. Having witnessed such cases, it only seemed fair to ensure that South Africa takes a careful approach to the imports. After it was established that the ban was only in a few areas, South Africa started applying a regionalised poultry import restriction and opened some regions for imports. This was to ease the poultry supplies in the domestic market, while ensuring there were careful considerations for the potential spread of the disease. This was also on the back of the recognition of the importance of Brazil in South Africa’s poultry imports. South Africa imports roughly 20% of its poultry products, which is about 350,000 tonnes a year, and approximately 70% of those imports are from Brazil. Having received convincing data on the successful containment and eradication of the disease, the South African authorities have sufficient confidence to lift the ban on Brazil’s poultry product imports. This was effective on July 4, 2025. With imports now back on a regular schedule, it is fair to assume that the fears of a meat price inflation uptick should subside. The resumption of imports bodes well for moderating food price inflation that we hold for the year. Wandile Sihlobo website

In the current world of trade fragmentation, one area the BRICS countries should consider focusing on more in their deliberations this year is deepening intra-BRICS trade. For South Africa's agriculture, this has been a central input in various discussions for some time, reflecting our desire to expand export markets to the BRICS countries, as well as the potential that lies in this region. Currently, South African agricultural exports to the BRICS remain relatively low (at less than 10% of our agricultural exports to the world, which are US$13.7 billion as of 2024). The BRICS group is not a trade bloc, which partly explains our low agricultural penetration. However, this may be an opportune time to change this reality and explore a more ambitious agricultural trade arrangement that aims to address the low intra-trade challenge in agriculture within this grouping. What has proven to be a constraint in the past is not the low demand, but rather the relatively high import tariffs and some non-tariff barriers (phytosanitary barriers) within this group, which continue to distort agricultural trade. The BRICS countries represent a substantial agricultural market, with annual imports exceeding US$300 billion. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

There are some glimpses of positivity that often arise from the agricultural data, which are worth highlighting. Indeed, these do not suggest that all is well with South Africa's agriculture; we continue to struggle with animal disease challenges in cattle farming and the poultry industry. However, if one is in horticulture or field crop production, the operating conditions are more favourable. The message I continue to receive from farmers of various fruits, vegetables, grains, and oilseeds, as well as other field crops, suggests a promising agricultural season. The yields are up from last year's drought period. For a moment, I was worried that the excessive rains throughout April would cause quality damage to some crops. At the start of the harvest season, particularly in some grains, that was indeed the observation of some farmers. But things seem to have changed quite significantly. I've heard that the quality of crops, especially soybeans, is not as bad as we anticipated, although there are indeed areas with challenges. Nevertheless, what is also encouraging is seeing a continuous upward revision of the harvest. For example, on June 27, the Crop Estimates Committee (CEC) released its fifth production estimate for the 2024-25 season in South Africa, lifting the expected harvest. While there are five more estimates to come in the following months, when we reach the fifth estimate, we generally have more confidence in the size of the crop, as well as its quality, as some areas would have delivered a sizable share of their crop to the silos. The CEC raised South Africa's 2024-25 summer grains and oilseeds production by 3% from the May 2025 estimate to 18,43 million tonnes. This represents a 19% increase from the previous season. A closer look at the data reveals that the monthly upward revisions were primarily in maize (+1%), soybeans (+14%), and dry beans (+4%). Meanwhile, the rest of the other crops were roughly unchanged from the previous month. More specifically, South Africa's maize harvest is now forecast at 14.78 million tonnes, which is 15% higher than the crop for the 2023-24 season. Of these 14.78 million tonnes, about 7.65 million tonnes is white maize, and 7.13 million tonnes is yellow maize. Importantly, these forecasts are well above South Africa's annual maize needs of approximately 12.00 million tonnes, implying that South Africa will have a surplus and remain a net exporter of maize. Regarding oilseeds, the soybean harvest is estimated at 2.65 million tonnes, representing a 43% year-over-year increase. The annual uptick is primarily due to improved yields resulting from favourable rainfall. A significant portion of the soybean crop has already been delivered to commercial silos, and the quality is generally encouraging. Importantly, this is the second-largest harvest on record, and it is not even final. The record harvest of 2,77 million tonnes was recorded in the 2022-23 production season. This ample harvest also means South Africa will remain a net exporter of soybeans and soybean products. We are far from the time when we were a net importer of soybean products for animal feed, mainly oilcake. We are now in a net exporter position. Sunflower seeds are up 15% from the previous season and are estimated at 727,800 tonnes. The groundnut harvest is estimated at 63,510 tonnes (up 22% y/y), sorghum production is estimated at 137,970 tonnes (up 41% y/y), and the dry beans harvest is at 74,299 tonnes (up 47%). The base effects and favourable agricultural conditions boosted the yields. In essence, South Africa is experiencing a recovery season for its grain and oilseed production, although some areas may face quality challenges. We see the benefit of the solid harvest in generally softening commodity prices, which are now at lower levels than last year, boding well for the moderating food price inflation for the year. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

Maize demand in the Southern African region is expected to remain strong in the 2025-26 marketing year, which commenced in May (this marketing year corresponds with the 2024-25 production season). One of the countries that imported most maize in Southern Africa in the 2024-25 marketing year was Zimbabwe. The country accounted for 56% of South Africa's maize exports of 2.3 million tonnes that year. In the 2025-26 marketing year, Zimbabwe's maize demand is expected to be smaller but remain substantial. The previous season presented unique challenges, primarily the mid-summer drought. This led to a 60% decline in Zimbabwe's maize production, leaving the country with only 635,000 tonnes of harvest. This was far below the 2,0 million tonnes Zimbabwe required for its domestic annual consumption. Thus, imports played a crucial role in meeting domestic needs. But the current season has brought some recovery. Zimbabwe's 2024-25 maize production is forecast at 1.3 million tonnes, according to recent data from the Pretoria-based unit of the United States Department of Agriculture (USDA). This is just more than twice the output from the previous season. This recovery is primarily driven by improved weather conditions and an increase in the area that farmers managed to plant for maize. Still, Zimbabwe's potential maize harvest of 1.3 million tonnes will not be sufficient to meet the country's domestic needs of 2.0 million tonnes, leaving it to import the balance. In the last marketing year, South Africa supplied nearly all of Zimbabwe's maize imports. However, in the 2025-26 marketing year, there may be some changes, with Zambia becoming an exporter again. Zambia, the second largest maize producer in the Southern Africa region, has seen a recovery in its 2024-25 maize production, now estimated at 3.66 million tonnes, up from 1.5 million tonnes in the previous season, according to Zambia's government data. Similarly to Zimbabwe, and South Africa, this increase in the harvest is due to favourable weather conditions and decent area plantings. The harvest is underway in the country. This means Zambia could return to being a net exporter of maize, as its domestic maize consumption is about 2.8 million tonnes, far surpassed by the expected harvest of 3.66 million tonnes. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

South African farmers and agribusinesses continue to exhibit resilience and optimism. The Agbiz/IDC Agribusiness Confidence Index (ACI) -- a sentiment indicator of business conditions in the sector -- although declining from the high levels it reached at the start of this year, remains at encouraging levels. After a notable uptick in the first quarter of 2025, the ACI fell by 5 points in the second quarter of the year to 65. Any level of the ACI that is above the 50-neutral point signals optimism. Regarding the slight decline, most respondents identified the uncertain global trade environment, lingering geopolitical tensions, and the domestic animal disease challenge as key factors constraining the sector. Despite the slight quarterly decline, the current level of the ACI implies that South African agribusinesses remain optimistic about business conditions in the country. The better summer rains and improvements at the ports, which have enabled exports with minimal interruptions, are among the positives. This survey was conducted in the second week of June, covering various agribusinesses operating in all agricultural subsectors across South Africa. A crucial point to remember when reviewing the Index is that sustained optimism, at levels above the 50-neutral market, is fundamental, especially in the long run, for fixed investment in the agriculture and agribusiness sectors. The ACI also serves as a leading indicator of agricultural growth prospects over time. We can thus expect slightly better farming output data for the second quarter of the year. The favourable production conditions for field crops, wine grapes, and various fruits and vegetables will be the primary drivers of the sector's performance. Indeed, we are yet to see the full impact of the Foot and Mouth Disease that is currently challenging the sector. This has started to impact the sentiment and is likely to continue in the coming months. In essence, the ACI results for the second quarter of 2025 indicate that the sector's mood remains upbeat about the recovery this year. Still, the results also show that the recovery will likely be uneven as some key subsectors struggle with animal disease. Notably, the dominance of geopolitical concerns in respondents' views illustrates the strong dependence of South Africa's agricultural sector on export markets and the need to diversify these markets. China, India, Saudi Arabia, and Egypt are among the key markets we should target for expansion. Still, as we drive diversification, we must work vigorously to retain access in various markets across the EU, UK, Africa, Asia, the Middle East, and the Americas, among others. Also significant are the collaborative efforts between business and government in addressing biosecurity issues in South Africa's agriculture, as well as efforts to promote more efficient network industries, better municipal management, and the implementation of the Agriculture and Agro-processing Master Plan, which is crucial to the long-term growth of the sector. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

We are yet to receive more details on China's intentions to lower import tariffs for various African countries. What is worth emphasising for now is that, from a South African agricultural perspective, this would be a welcome development. China has profound importance in global agriculture. In 2023, China was a leading importer, accounting for 11% of global agricultural imports, with imports valued at US$218 billion. The leading suppliers of farm products to China are Brazil, the U.S., Thailand, Australia, New Zealand, Indonesia, Canada, Vietnam, France, Russia, Argentina, Chile, Ukraine, the Netherlands, and Malaysia. However, China has been on a journey to diversify its agricultural exports beyond these suppliers, which has accelerated following the U.S. initial tariffs in 2018 and is ongoing in 2025. South and Latin American countries, as well as Australia, have been the primary beneficiaries of China's diversification strategy so far. But South Africa must also be part of this conversation. And what the Chinese authorities have signalled is a starting point for a deeper conversation on agricultural trade. The first step will have to be for South African authorities to approach China to present a range of products that can be exported, and then build from there. South Africa remains a negligible player in the Chinese agricultural market, accounting for a mere 0.4% (US$979 million) of China's agricultural imports of US$218 billion in 2023. These exports include a variety of fruits, wine, red meat, nuts, maize, soybeans, and wool. However, there is room for more ambitious agricultural export efforts. The South African agricultural sector, comprising organised agriculture and researchers, consistently emphasises the need to lower import tariffs in China and remove phytosanitary constraints on various products. There is now a pathway to have a productive conversation about this matter and move with speed. Of course, once more details are available on tariffs, we will also need to examine the phytosanitary issues related to agriculture. Overall, this is welcome news. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

In a year where trade has dominated the headlines since the U.S. started imposing higher tariffs against its trading partners, agricultural export activity is worth paying close attention to. Encouragingly, the start of the year has remained positive for the sector. In the first quarter of 2025, South Africa's agricultural exports totalled US$ 3.36 billion, up 10% from the same period a year ago. This is a function of both higher volumes of various product exports and better commodity prices. The products that dominated the exports list in the first quarter were mainly grapes, maize, apples, pears, apricots, cherries, peaches, wine, wool, fruit juices, nuts, dates, avocados, pineapples, and beef, among other products. While the ports remain a challenge and require further improvement and investment, the agricultural export season in the first quarter experienced less friction than in the recent past.. South Africa does not engage in one-way trade. The country imports various agricultural products. In the first quarter of 2025, South Africa's agricultural imports totalled US$ 1.94 billion, a 19% increase year-over-year. The increase resulted from higher value and volume of major products South Africa imports, such as wheat, palm oil, rice, poultry, and whiskies. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website

The Southern Africa region is far better regarding food supplies today than a year ago. For example, Zambia's 2024-25 maize crop has bounced back. The government forecasts the harvest to be 3,66 million tonnes, up from 1,5 million tonnes the previous season. This is because of favourable weather conditions and the decent area plantings. The harvest is underway in the country, and the message we are hearing about the quality of the crop remains encouraging. This also means Zambia could return to being a net exporter of maize as its domestic maize consumption is about 2,8 million tonnes, far surpassed by the expected harvest of 3,66 million tonnes. Importantly, one can expect the domestic maize prices to continue moderating as the harvest continues, thus easing the general food price inflation. Zambia is also not the only fortunate country in the Southern Africa region. The entire region received better rains, even excessive rains in some areas. We continue to hear encouraging news of the better grain harvest in Zimbabwe. For example, Zimbabwean farmers likely planted 1.7 million hectares of maize this year, slightly lower than last year but decent. We will know more about the yields in the coming weeks and months. What is clear at the moment is that Zimbabwe will, too, have a better maize harvest compared to the 2023-24 drought year. The South African story is even more optimistic. For example, South Africa's 2024-25 maize harvest is forecast at 14,66 million tonnes. There is an increase in white and yellow maize, with harvests now at 7,75 million tonnes and 6,91 million tonnes, respectively. Overall, the maize harvest of 14,66 million tonnes is up 14% year-on-year, primarily benefiting from expected yield improvements on an annual basis. Importantly, these forecasts are well above South Africa's yearly maize needs of about 11,8 million tonnes, which implies that South Africa will have a surplus and remain a net exporter of maize. The 2024-25 season is a positive change for Southern Africa's staple crop, maize. Importantly, it is encouraging to see Zambia bounce back. This country is vital in maize supplies to the region as the second largest producer after South Africa. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website